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File #: 2018-5750 (15 minutes)   
Type: Regular Agenda Item
Body: City Council
On agenda: 7/24/2018
Title: Introduction of Ordinance Approving a Lease with Small Size Big Mind, Inc. for Two Years with a One-Year Option for Building 35, a 2,764-Square-Foot Building Located at 2450 Pan Am Way in the Main Street Neighborhood at Alameda Point. [In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under the CEQA Guidelines Section 15301(c) - Existing Facilities.] [Requires Four Affirmative Votes] (Base Reuse 819099)
Attachments: 1. Exhibit 1 - Aerial Map, 2. Exhibit 2 - Premises, 3. Exhibit 3 - Executed Lease, 4. Correspondence - Updated 7-24, 5. Ordinance

Title

 

Introduction of Ordinance Approving a Lease with Small Size Big Mind, Inc. for Two Years with a One-Year Option for Building 35, a 2,764-Square-Foot Building Located at 2450 Pan Am Way in the Main Street Neighborhood at Alameda Point.  [In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under the CEQA Guidelines Section 15301(c) - Existing Facilities.] [Requires Four Affirmative Votes]  (Base Reuse 819099)

 

Body

 

To: Honorable Mayor and Members of the City Council

 

From: Elizabeth D. Warmerdam, Acting City Manager

 

Re: Introduction of Ordinance Approving a Lease with Small Size Big Mind, Inc. for Two Years with a One-Year Option for Building 35, a 2,764-Square-Foot Building Located at 2450 Pan Am Way in the Main Street Neighborhood at Alameda Point

 

BACKGROUND

 

Small Size Big Mind (SSBM) was established in 2006 and is a year round infant care and preschool serving children from eight weeks to five years old located on the east end of the City of Alameda . Due to extensive waiting lists of over 80 families, SSBM has been working with the City to find an expansion site for over a year and has expressed great interest in expanding on the West End, including at Alameda Point. City staff has been actively supporting SSBM as they seek to expand in Alameda and meet the growing demand for their preschool.  Building 35 located in the first development phase of the Main Street Neighborhood at Alameda Point that is currently being marketed for a market rate development is the only near-term site City staff has been able to find as an interim site for expansion until SSBM finds a more permanent location.  More detail on the other potential sites is provide below.

 

DISCUSSION

 

Building 35 provides an appropriate classroom and fenced yard space. The tenant will need to provide an accessible entrance/exit and bring the building up to a preschool standard.  To offset the investment the tenant is making in the building, the lease provides a capital repair credit in the amount of $60,000 which may be credited against rent payments during months 1 through 15 of the proposed term of the lease. Monthly base rent is set at $4,141 for months 1 through 12 and $4,266 for months 13 through 24. If SSBM continues for the one-year option term, rent will increase to $4,394.

 

Staff expects that the first phase of the development in the Main Street Neighborhood to start in three years which makes Building 35 only an interim expansion site for the school until a permanent location is secured at an alternative location.  Because of the importance of not interfering with the timeline associated with the first phase of the Main Street Neighborhood development, staff was not willing to advance this lease until SSBM could demonstrate credible leads on alternative locations to relocate the school.  SSBM has demonstrated to City staff that they have credible alternatives for a permanent expansion of the school by year three, which include:

 

                     Renovating and purchasing the chapel building at Alameda Point;

                     Becoming a subtenant in one of the multi-tenanted buildings being developed in the adaptive reuse area (SSBM currently has an agreement of terms with one); and

                     Continuing evaluation of already identified potential land sites for portable development of the school facility.

SSBM staff understands that Building 35 is for no more than three years due to impending new development and they have indicated a strong commitment to simultaneously searching for a new permanent location.  Therefore, staff has agreed to advance the interim plan for City Council consideration.  The lease includes an aggressive holdover rent of 200% to ensure SSBM continues to look for an alterative permanent location.  Staff and the broker also will continue to work to find an alternate site for SSBM at Alameda Pont, as they have expressed enthusiasm for providing daycare/preschool services for not only serving the families on their waitlist, but also the new families moving into Alameda Point.  

 

FINANCIAL IMPACT

 

The monies from the leases will be deposited into the Base Reuse Lease Revenue Fund (Fund 858) and are limited to uses permitted under the Economic Development Conveyance Memorandum of Agreement with the United States Navy (Navy).

 

MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE

 

This action does not affect the Alameda Municipal Code.

 

ENVIRONMENTAL REVIEW

 

In accordance with the California Environmental Quality Act (CEQA), this project is Categorically Exempt under the CEQA Guidelines Section 15301(c) - Existing Facilities.

 

RECOMMENDATION

 

Introduce an ordinance and lease with Small Size Big Mind, Inc. for two years with a one-year option for Building 35, a 2,764-square-foot building located at 2450 Pan Am Way in the Main Street Neighborhood at Alameda Point.

 

Respectfully submitted,

Jennifer Ott, Base Reuse and Transportation Planning Director

 

By,

Nanette Mocanu, Assistant Community Development Director

 

Financial Impact section reviewed,

Edwin Gato, Acting Finance Director

 

Exhibits: 

1.                     Aerial Map

2.                     Premises

3.                     Executed Lease